miven machine tools ltd Management discussions

a. Industry Structure and Developments:

The Company manufactures CNC horizontal turning lathes of 6" and above. The company caters to the special needs of certain sectors of capital goods industry and hence is having a very limited market size. Moreover, since the life of the machine is long lasting, the demand for replacement of machines from the same customer is very remote.

b. Opportunities and Threats:

Make in India initiative pursued by the new government at the Centre is believed to have created new opportunities for the manufacturing sector in general including the segment in which your company is operating. Many of the industries in the defense and automotive segments are considering expansion of their product lines and this could provide the much needed breathing space for the revival of the fortunes of the Company going forward.

At the same time, many competitors are also entering the market. Reduced custom duty on imported machinery of similar kind, large working capital needs, longer time for conversion into sales, rejection of product on delivery on flimsy grounds by the customers belonging to public sector has largely affected the viability of operations and pose real threats got the survival of this industry. Moreover, the machine tools industry has been experiencing the trends of recession since a long time.

c. Segment-wise or product wise performance:

Your company manufactures only one type of product i.e. CNC turning machine and ancillary machines and hence operates only in one product segment. During the year under review, the Company has manufactured a limited number of machines.

d. Outlook

During the year under review, your company achieved a turnover of Rs. 102.40 lakhs from manufacturing operations as against previous years turnover of Rs. 248.66 lakhs. Company has earned a net profit after tax of Rs 740.90 lakhs on account of exceptional income arising out of writing of loans taken from related parties, as against a loss of Rs.148.79 lakhs during the previous financial year. The second wave of COVID-19 pandemic cast its adverse effects and had severe impact on the operations of the Company as the customers did not come forward to pick up the deliveries for the machines. In addition to this, the machine tools industry continues to be passing through a prolonged period of recession and as a result the Company has been incurring losses year after year. The developments under this situation may have an impact of the financial performance of the Company during the ensuring financial year 2023-24 also. The outlook does not seem to be encouraging although the market acceptability of the product is quite sound. Last year, the Company has repaid all the loans taken from the banks and was in a position to reduce

e. Risk and concerns:

Rising input costs and high interest burden on borrowed funds poses real challenges in maintaining a healthy margin on the sales and profitability. Delay by the customers in preacceptance testing and final trials prior to shipment has created adverse liquidity constraints as the level of inventory piles upespecially from the customers pertaining to the government department customers

f. Internal Control systems and their adequacy:

Company has a proper and adequate internal control systems which ensures that all the assets and rawmaterials and spare parts are adequately safeguarded against loss from unauthorized use and pilferage. All the transactions and movements are checked, verified and recorded properly. Regular internal audit processes are in place which are conducted by independent professionals and theses systems are working satisfactorily.

g. Discussions on financial performance with respect to operational performance:

During the year under review, your company achieved a turnover of Rs. 102.40 lakhs from manufacturing operations as against previous years turnover of Rs. 248.66 lakhs. Company has earned a net profit after tax of Rs 740.90 lakhs on account of exceptional income arising out of writing of loans taken from related parties, as against a loss of Rs. 148.79 lakhs during the previous financial year.

Company continues to incur operating losses.

h. Material developments in Human Resources/Industrial relations front, including number of peopleemployed:

In order to cut down the manpower cost, company was constrained to reduce its head count to a minimum possible level and the transition has been very smooth. The existing employees, are highly motivated, have taken upon themselves the additional task and responsibility and ensured that the production has beencontinued seamlessly. Clearly, the exit of the former employees has not affected the operations. Further, the Executive director vacated his office and his functions have been efficiently looked after by the senior staff. The employer employee relations remained very cordial throughout the year.

INFORMATION PURSUANT TO THE PROVISIOSNS OF SECTION 134(3) (m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014

A. CONSERVATION OF ENERGY:

(i) Steps taken or impact on conservation of energy:

Operations of the company are not power intensive. However, steps have been taken to minimizethe power consumption

(ii) Steps taken by the company for utilizing alternate sources of energy:

Company is exploring options to consider utilizing alternate sources of energy like generation of electricity by using solar energy and/wind power, after the company is able to repay the debts and becomes cash rich.

(iii) Capital investment on energy conservation equipments:

Company is heavily debt ridden and has been incurring losses year after year. At this stage, Company cannot afford to make any capital investment for any energy conservation or exploringaltemate sources of energy.

B. TECHNOLOGY ABSERPTION

i) Efforts made towards technology absorption:

Company has fully absorbed the present technology deployed for manufacture of CNC machines.

ii) Benefits derived like product improvement, cost reduction, product development or import substitution.

The benefits of products improvement are likely to accrue after an estimated period of 5 years when the company is able to repay all its debts and generates sufficient profits to run the operations on the strength of its own funds.

iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): Not applicable as the company has not imported any technology during the period of last three years.

a) Details of technology imported: Not applicable

b) The year of import: Not applicable

c) Whether the technology has been fully absorbed: Not applicable

d) If not fully absorbed, areas where absorption has not taken place and the reasons thereof: Notapplicable; and

iv) The expenditure incurred on Research and Development; Nil.

On behalf of the Board of Directors Miven Machine Tools Limited

Vikramjl Sirur	A.B. Kamalapur
Managing Director	Director
DIN 0312980	DIN 00474775
Hubli
May 30, 2023
Registered Office:
Sirurs Compound, Karwar Road,
Hubli-5 80024, Karnataka, India